European natural gas prices slipped on Tuesday after media reports indicated the White House is weighing an end to current military operations tied to the Iran conflict instead of pursuing a mission to physically reopen the Strait of Hormuz.
The Dutch TTF front-month contract - the benchmark for European natural gas - was last down 2.3% at 53.73 euros per megawatt hour, reflecting investor recalibration after the developments.
The Wall Street Journal reported that President Donald Trump has told aides he is considering concluding the campaign against Iran without mounting a large-scale operation to clear the strait. According to the report, administration officials said Mr. Trump and his aides judged that an effort to reopen the waterway would extend the conflict beyond his preferred four- to six-week timeline.
The WSJ account said the president decided the United States would draw down current hostilities once it had achieved principal objectives of degrading Iran's naval and missile capabilities. After that, the report said, Washington planned to pressure Tehran diplomatically to restore passage through the strait. If diplomatic pressure failed, the U.S. would press European and Gulf allies to take the lead in reopening the waterway.
The Strait of Hormuz has been central to the U.S.-Israel operation against Iran, with Tehran having effectively blocked the passage through mines and missile strikes, the report noted. The narrow channel off Iran's southern coast accounts for roughly one-fifth of global oil flows, a scale that has amplified the market response to its disruption.
Last week, the president set an April 6 deadline for Iran to either reopen the strait or face U.S. strikes on critical energy and water infrastructure. Iran has largely rebuffed calls to unblock Hormuz and has carried out attacks on tankers attempting transit in the last month, according to the reporting.
The closure of the strait has fed a sharp rise in global oil and gas prices over the past month, lifting inflation concerns worldwide and threatening economic pressure across a range of industries sensitive to higher energy costs. Europe has been particularly exposed because of its reliance on liquefied natural gas flows from the Persian Gulf after Russia's full-scale invasion of Ukraine in 2022.
Over the past month, Dutch TTF natural gas futures surged by more than 68% as the conflict and resulting disruptions translated into higher European wholesale gas prices.
Data released on Tuesday from Eurostat showed eurozone consumer price inflation accelerated to 2.5% in March. That reading was below some economists' estimates but remained above the European Central Bank's 2% medium-term target, with energy-price shocks cited as a principal driver. By comparison, consumer prices in the euro-area rose 1.9% in February, a month that largely predates the joint U.S.-Israeli assault on Iran that has now extended beyond a month.
Contextual note: The market movements and policy considerations outlined above are drawn from the cited reporting on U.S. administration deliberations and the publicly released inflation figures from Eurostat.